I have a client that owns a 403(b) tax deferred annuity. Balance in the annuity is only about $3,200 and the death benefit equals the account value. My client is 52. She purchased the annuity in 1997 and it is out of surrender.

Can she elect to surrender the annuity policy and just roll the $3,200 balance into her Traditional IRA? I know a rollover would be non-taxable but want to make sure there isn’t a 10% Federal penalty on this since this is an annuity and client is under age 59.5.